As a beginning investor what is the best thing to do when aquireing properties as far as ownership goes?
I’ve heard to have a seperate LLC for each house?
Is this a good idea? Is haveing properties in your own name not a good idea?
Thank you!
To me a seperate LLC for each house is overkill. I suggest you don’t worry about this issue until you have a property and then address it at that time. I think too many newbie’s spend money setting up LLC’s, Corp’s etc. which isn’t needed until you start doing some deals. Figure out what your strategy is going to be and then have a lawyer familiar with real estate figure out the best way to protect your assets.
I agree, why make something more complicated than it needs to be.
Also conider your position as a new investor: will you be flipping for cash or holding for rent? If you are going to hold property, I’d suggest you do set up an LLC for each. They are not hard to set up and only cost about $600. Too much chance to lose everything on a lawsuit.
If you are going to be getting rid of the property, I never used an LLC when I started. Not to say that you can’t, but you can save the $.
Good luck.
I’m looking at flipping for myself, most likely doing seller’s seconds, land contracts etc., yet I’m not oppsed to buy and hold, renting a few out.
I hold with llc and flip with s corp. titles to properties are normally in trusts (personal preference). as a noob, i think its great that you are planning for your future success. initial planning is very important.
good luck,
Lance Waddle
Realvestors
Well first of all a LLC is one of the best types of coorperations if not the best so you’ve chosen a great one. But first since your starting out do at least 3 deals before you start your coorperation because after 3 deals you’ll sort of no where your headed and what your strategy is. Unless on your first deal you make so much money that your just surprised at the amount and to protect yourself start a coorperation. And when you do start it theres no need to start a new one for each deal, no one does that really.
Been thinking of doing this myself, but have a couple ?s. If putting more than one property in an L.L.C can someone sue the llc for one or more properties? I don’t really understand the concept of an L.L.C… Could someone give the details in non legal easy to understand terms?
If someone goes after an LLC, they can go after anything that LLC owns. That’s why some people take the extreme measure of putting only one property in a LLC. Whatever way you go, keep in mind, it more than just starting an LLC that provides the protection. You need to set it up correctly with operating agreement, who controls what, etc.
I agree with chilipepper. But its a moot point until you do your first deal. If you decide ahead of time, you can set up a land trust and drop the property into it immeidately. within 5 minutes, just need to get it notarized and get it recorded. You can always enter another land turst and have the llc as the beneficiary.
have a great day
I just did my first project, a rehab for rental. I’m midway through the renovations now. My tenant/dweller insurance when it kicks in, has $300K liability…should I only go LLC if I get more properties, since I’m already covered by insurance? Wouldn’t it be a waste? Or does LLC protect me from other things that my insurance may not?